An economy has 22 units of labor and produces goods x and y. The production functions are x = 0.2L, and y = 0.5Ly, where Lx and Ly represent the labor allocation. Say the economy is currently producing x = 2 units and y = 6 units. This implies that Lx. and Ly= O 10; 14 O 10; 12 O 8:14 O 8; 12

An economy has 22 units of labor and produces goods x and y. The production functions are x = 0.2L, and y = 0.5Ly, where Lx and Ly represent the labor allocation. Say the economy is currently producing x = 2 units and y = 6 units. This implies that Lx. and Ly= O 10; 14 O 10; 12 O 8:14 O 8; 12

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Chapter1: Making Economics Decisions

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Question

An economy has 22 units of labor and produces goods x and y. The production functions are x =
0.2L, and y = 0.5Ly, where Lx and Ly represent the labor allocation. Say the economy is currently
producing x = 2 units and y = 6 units. This implies that Lx = and Ly=
O 10:14
O 10: 12
O 8; 14
O 8; 12
--x--

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